June 23, 2012

The last piece in the ACC puzzle

The proportion of long-term ACC clients moving on to benefits has surged since the corporation adopted a tough new stance, which has fuelled allegations that they are being forced off compensation before they are rehabilitated.

. . . figures show that the proportion of long-term claimants leaving ACC and going on to health-related, unemployment or domestic purposes benefits rose sharply from early 2009.

In the five years to 2008, the proportion going on to benefits was 12.1 per cent, but during 2009 that rose to 16.4. In the first five months of 2010, the most recent data held by ACC, the proportion rose to 19.4 per cent.

National likes to portray itself as ‘fiscally responsible’, bringing ‘real world’ skills and business acumen to government. Well this is as fiscally irresponsible as you can get. ACC claimants who transition back into work become taxpayers: an asset to the state, while beneficiaries are a fiscal liability.

But under National, ACC aren’t incentivised into transitioning people back into work – they’re only incentivised to get people off their corporation’s books, and its easier for ACC staff to move people onto welfare and collect a nice bonus than it is to transition them back into paid work.

Since they came into government National has spent a LOT of time and energy ranting about getting touch on beneficiaries and reforming the welfare system to reduce benefit dependency, while at the same time they’ve retooled ACC into an organisation that increases the number of beneficiaries.

Update: Adam Bennett from the Herald comments on his story:

The reduction of 3,644 long term claimants is a net figure. There were, according to the figures I got from ACC, just under 9000 “1st time entries” over the period. Therefore somewhere between 12,000 and 13,000 long term claimants left ACC over the period.

The second thing is I don’t think you can assume that if these people didn’t go on benefit they went into employment. Based on emails I received in response to this story some folks didn’t get work and for whatever reason weren’t eligible for a benefit. Suffice it to say they weren’t particularly happy about this state of affairs.

Like this:

Related

ACC has simply evolved to another beneficiary service, albeit with a higher benefit. Worse, its become even more of a political football where one party loosens the criteria and the other tightens it up. Even worse, the criteria for eligibility has become nonsensical so that a 30 year old who developes a hernia is refused an operation because his condition is described as general degeneration, but someone with sexual abuse in their distant pass qualifies for assistance because they developed a mental illness.. but someone who was “only” beaten up and gets mentally ill doesn’t qualify.
And a person stricken with a neurological disease which leads to mental illness doesn’t qualify.

Its a rubbish system rife with mission creep and corruption.. which is probably why I can think of no other country that has emulated it.

another perspective to take would be that the problem is not so much with ACC being too generous, as the sickness benefit being way too low. Because of this ACC (and the state in general) has an incentive to put people onto the sickness benefit, rather than ACC.

Having actually been in a relationship with somebody on the sickness benefit (for 6 months, now they’re back working full-time), it is not set at a level in which you can live with either dignity or comfort. in fact, it’s hardly set at a level where you can afford to buy healthy food, keep the house warm and pay rent in auckland.

Are people more likely to recover and get back into work if they’re being paid 80% of their previous wage and can maintain a decent standard of living? Yes, I think so. Can the state afford it? Maybe if it got more people back into work faster it would be worth it.

JC – there are no words for the lack of empathy for sexual abuse survivors you displayed in that comment. So I won’t even try.

You have overlooked the fact that these are all long-term ACC cases. They have usually been through a small fortune’s worth of rehab by this stage and it is usually pretty clear that nothing will get them back into their former work. ACC offer retraining for those whose disability has been created by the accident alone, but move them on to sickness benefit if the problem is that the accident exacerbated degenerative change. WINZ will then pay for retraining while paying them the
much lower amount of the sickness benefit. Tax generation is not the issue here – it is the size of the repayments from ACC compared to WINZ.

This is not to say that I don’t think that ACC is overly keen to call accident-related problems “degenerative”, it is just that this transfer the WINZ is happening well passed the standard rehab stage.

I’m sure you’re right about that, Macdoctor. But we have here the govt getting ACC to introduce financial incentives for its staff to get long-term claimants off the books, correlated with a sharp rise in the percentage of claimants moving onto benefits. Correlation /= causation but that’s a pretty damn suspicious correlation when you look at it.

“JC – there are no words for the lack of empathy for sexual abuse survivors you displayed in that comment. So I won’t even try.”

Your lack of empathy for those who get beaten severely and those with crippling permanent neurological disease is likewise noted.

We also need to take DPF’s point into consideration..

“Okay so 3,644 people have gone off ACC, and 19.4% have gone onto welfare. First of all that presumably means 81% or 2,937 are now in employment which is a good thing.

Of the 707 who have gone onto welfare, the data suggests 441 would have been on welfare under the previous trend. That means an extra 266 have gone onto welfare.”

And..

“Of the 266 extra people on welfare, a key thing might be what benefit have they gone onto. If they have gone onto an invalid’s benefit or even a sickness benefit, then it suggests there could well be a problem. If however they are on the unemployment benefit, then that may just be because the jobs market is still subdued.

So that data is interesting and worth investigating more. But it is not conclusive of itself.”

MacDoctor has answered part of the question but it would be good to know which benefits the 266 have on to, and what type of injuries the had/have that might make them less employable.

The reduction of 3,644 long term claimants is a net figure. There were, according to the figures I got from ACC, just under 9000 “1st time entries” over the period. Therefore somewhere between 12,000 and 13,000 long term claimants left ACC over the period.

The second thing is I don’t think you can assume that if these people didn’t go on benefit they went into employment. Based on emails I received in response to this story some folks didn’t get work and for whatever reason weren’t eligible for a benefit. Suffice it to say they weren’t particularly happy about this state of affairs.
.

This National government must be one of the least competent ever. They cut taxes…and blew out the deficit. Even if they did that in purpose to justify privatisation of assets and handing state functions over the private sector…….that is merely an explanation….and in no way changes the destructive effect of their bad policies or poor management. Bill English wants to lower interest rates. The effect of that will be reduced incomes to savers and people people who rely on interest incomes – like the elderly. At the same time it will help expand the housing bubble and generally make our private debt problem worse…not better. His reason for dropping interest rates is that he wants to lower the NZ$. That will make imports more expensive for everyone…and we now import almost everything….from cars to toothpaste. The people at the bottom will be hit the hardest…and a lot those will be the elderly for whom Mr English is working hard to reduce their incomes. The way he will do all this is cutting government debt – though austerity – further pushing wages down and further reducing the working conditions of an ever greater number of Kiwis.

I don’t know what “nation” the National Party claims to be working to improve …….but it can’t be this one by any rational measure.

I’m sorry, I don’t consider myself to be conservative at all, but I believe in the abolishment of ACC, to be replaced with an increase in the monetary amount of sickness and invalids benefits. I don’t see why employers should have to pay money to a corporation which pays 80% of the pay packet to people who injure themselves on the job, unless the company is negligent which is a relative rarity compared with the number of ACC claims we have to contend with. People that injure themselves are not working so employers shouldn’t have to pay for their normal weekly living expenses (unless, as stated, they have been negligent).